Clean Energy Fuels Taps into Landfill Biomethane

Clean Energy Fuels Corp. has signed a 15-year agreement through its subsidiary, Dallas Clean Energy, LLC, for the sale of renewable biomethane produced at the McCommas Bluff landfill in Dallas.

Beginning this month, the biomethane will be sold at fixed prices that increase in 2010 and 2011 and then remain fixed over the remainder of the agreement. The price for the "green" gas was not disclosed but represents a significant premium to the prevailing price for conventional natural gas.

The agreement calls for the sale of up to 4,500 MMBtus per day of biomethane from April 2009 through September 2010 and between 5,000–6,000 MMBtus per day of biomethane through March 2024. The actual volumes sold will depend on the gas recovery rates from the landfill and successful expansion of the gas processing facilities.

Shell Energy North America will act as the purchaser and supply the biomethane to the end-user—a utility that will use the biomethane in power generation to help meet applicable Renewable Portfolio Standards. Atmos Energy Corporation will provide intrastate transportation services from the gas processing plant.

"This gas sale agreement validates selling renewable biomethane as a valuable, low-carbon fuel. It provides Clean Energy with a sound, long-term revenue stream and also supports expansion of the plant’s production capacity for additional gas sales, including potential use as vehicle fuel," said Andrew J. Littlefair, Clean Energy president and chief executive officer "Many of our largest customers are showing interest in biomethane for their fleet vehicles as it is one of the best alternative fuels to meet new Low Carbon Fuel Standards coming in California and other states."

"We will retain the carbon credits related to the biomethane production and will pursue sales of those credits in the future," noted Littlefair.

The interstate "green" gas sale agreement is believed to be one of the largest such interstate sales of biomethane completed in the United States.

Clean Energy acquired a 70 percent ownership interest in Dallas Clean Energy in August 2008. The McCommas Bluff landfill gas operation owned by Dallas Clean Energy is one of the largest landfill gas operations in the United States. The landfill, owned by the city of Dallas, opened in 1975 and is scheduled to close in 2042. It is estimated that pipeline quality methane gas will continue to be produced for approximately 30 years after the landfill closes.